Capital One: Back-to-School an Opportunity to Teach Kids About Money

As the new school year kicks off, most parents consider their student’s basic needs such as book bags, clothes, and writing supplies to be just another of the many expenses in raising kids.

But teenagers and parents generally have different ideas about exactly how much money parents are going to spend on these supplies, according to an annual survey released by Capital One Bank on Monday. For the survey, kids aged 11-17 are considered to be “teens.”

While 68% of parents surveyed expected to spend more than $100 on back-to-school purchases, only 41% of teens thought their parents would spend more than $100. This gap suggests that teens just don’t realize the cost of these items, while parents are very aware of just how much it takes to get their child supplied for school.

An interesting finding in Capital One’s survey was that even though only 15% of parents actually expected their teen to help pay for their own school supplies, 43% of teens planned to contribute to their back-to-school purchases - suggesting that parents could be missing out on a great opportunity to talk about budgeting and money management.

"This year's survey found that teens and parents are not always on the same page when it comes to expectations about back-to-school budgets and spending," said Shelley Solheim, Director of Financial Education at Capital One. "The back-to-school shopping season is often overlooked as an opportunity for parents and teens to talk about financial education principles and concepts, but it is an ideal time for teens to play a role in the household budgeting process and learn an important money management lesson."

And though parents may feel that they’ve discussed money matters with their kids, the message may not be getting through. Of the parents surveyed who said they talked about finances with their teens, only about half of the teens said their parents discussed these issues with them. For example, 57% of parents said they’ve talked about the difference between needs and wants with their kids, but only 26% of teens surveyed said their parents discussed this with them. And while 28% of parents said they’ve created a back-to-school budget with their kids, only 15% of kids reported that they’ve created a school shopping budget with their parents.

Most parents feel that paying the bills and managing the household budget is their responsibility, and likely feel that their kids should not be concerned with the household finances - 93% of teens said they are not involved in paying household bills or managing the family budget, and 46% of teens don’t even know how to create a budget.

But over half (55%) of the kids surveyed are very interested in learning about money management.

Capital One advises parents to use back-to-school shopping as an opportunity to teach their kids how to handle money. Parents can teach their teens about money by talking to them about how much they are prepared to contribute, making a list, creating a back-to-budget and doing the school shopping together.



Source:
Capital One Bank